Nazara reports $3.31 million loss in Q2FY26 amid RMG ban
Nazara Technologies, India’s only publicly listed gaming company, reported a consolidated net loss of Rs 29.35 crore ($3.31 million) for the second quarter of FY26 (Q2FY26). The company had recorded a net profit of Rs 23.83 crore in the same period last year. The loss was mainly due to a Rs 914.7 crore impairment on its investment in Moonshine Technologies, following the government’s ban on real-money gaming under the new Online Gaming Act.
Revenue surges despite regulatory headwinds
Nazara’s business performance remained strong on the operational front. Revenue from operations rose 65 percent year-on-year to Rs 526.46 crore, compared with Rs 318.94 crore in Q2FY25. Sequentially, revenue increased by 5.5 percent from Rs 498.77 crore reported in the first quarter of FY26 (Q1FY26).
The company also recorded a sharp rise in other income, which jumped to Rs 1,104.46 crore from Rs 25.31 crore in the same quarter last year. This increase was driven by a Rs 1,098.46 crore fair value gain following Nazara’s reclassification of its esports arm, Nodwin Gaming, from a subsidiary to an associate company.
Major impairment from Moonshine Investment
Nazara’s bottom line took a major hit due to the impairment on Moonshine Technologies, which operated platforms such as PokerBaazi and other real-money gaming properties. The company reduced the carrying value of its investment in Moonshine to Rs 96.53 crore as of September 30, 2025, recognising a total impairment of Rs 914.7 crore during the quarter.
The impairment follows the implementation of the Promotion and Regulation of Online Gaming Act, 2025, which prohibits real-money gaming across India. The regulatory change has significantly impacted firms involved in cash-based online games.
Expenses rise in line with business growth
Total expenses during the quarter stood at Rs 534.25 crore, marking a 66.3 percent increase from Rs 321.27 crore in Q2FY25. On a sequential basis, expenses were up 2.5 percent from the previous quarter. Despite higher costs, Nazara’s operational momentum remained stable, supported by growth in its freemium and gamified learning segments.
The company’s diversified portfolio, which includes offerings in esports, gamified learning, and interactive entertainment, continued to show resilience amid industry disruptions.
Nitish Mittersain, joint managing director and chief executive officer of Nazara Technologies, said the company remains focused on long-term value creation despite the accounting adjustments in Q2.
“Nazara continued strengthening its position as an IP-led, global gaming platform. We are evolving from publishing individual games to building and scaling long-term franchises,” he said.
Mittersain added that the one-time accounting items recorded during the quarter, including the Moonshine impairment and the Nodwin revaluation gain, do not affect operating cash flows or the company’s core business momentum.
Impact of the new law
The PROGA 2025 has reshaped India’s online gaming market. The law bans all real-money games, including those based on skill such as rummy and fantasy sports, if they involve any monetary stakes.
The law defines an “online money game” as any digital game where users pay entry fees, deposit money, or place stakes with the expectation of financial returns. Esports and social games are excluded from the ban.
Some companies have challenged the constitutional validity of the PROGA, arguing that games of skill should not be treated the same as games of chance. The Supreme Court of India is currently hearing petitions on the issue, with the next hearing scheduled for 26 November.
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